Government Regulation No. 34 Year 2016 dated August 8, 2016

​INCOME TAX ON INCOME FROM TRANSFER OF LAND AND/OR BUILDING RIGHTS AND SALE PURCHASE AGREEMENT ON LAND AND/OR BUILDING ALONG WITH ITS AMENDMENT

​Income from transfer of land and/or building rights or sale purchase agreement are payable to final income tax. Including transfer of rights are sales, swap, grants, in heritage or any other kind of transfer.

Income from sale purchase agreement are seller whose name is in agreement for the first time it was signed or buyer whose name is in the agreement before any amendments.
Income tax rate for transfer of rights are as follow:

1. 2.5% from gross amount for taxpayer in property business except for transferring basic house or basic flat;
2. 1% from gross amount for taxpayer which business are transferring basic house or basic flat;
3. 0% for transferring land and/or building to government, special assignment state owned enterprise or regional state owned enterprise.

Gross amount means:

1. Amount based on official decision for transferring to government
2. Auction amount for transferring in auction
3. Fair value when such transfer involving related parties
4. Actual amount received for sale purchase excluding related parties transaction
5. Market value for transferring through swap, rights release, rights transfer, grants, in heritage or any other transfer transactions.

For sale purchase agreement, gross amount means:

1. Actual amount received for non related parties transactions
2. Fair value for related parties transactions

Criteria for basic house or flat are the same as criteria for such properties which exempted from VAT.

Taxpayer, either individual or corporate, who receive income from rights transfer of land and/or building, must pay the income tax before any legal documents such as deed, deal, agreement or minutes of auction is signed by official. Official will only sign the legal document after receiving copy of tax payment form or any equal document, and must send monthly report of signed documents to DGT. Such official including land deed official, auctioneer or other official who has authorization by rule and regulation.

Taxpayer in property business, income tax will be payable at the time of payment, either partial or whole, by buyer. Such payment including down payment, interest, charges and any additional payment made by buyer and must be paid at the latest 15 days after end of month.

Taxpayers who transfer the rights to government, income tax will be collected by state treasurer and then deposit it to the bank by using tax payment form on behalf of taxpayer. State treasurer must submit land and/or building transfer to DGT.

Taxpayer whose name is recorded in sale purchase agreement before any amendment must pay the income tax and give copy of tax payment form to the seller, so seller may sign the legal document. Seller must report the amendment to DGT.
Exempted from income tax payment are:

1. Individual whose income is below non taxable income and gross transaction amount is under IDR 60 millions which not part of partial transaction.
2. Individual who transfer land and/or building as grant to blood related family member, religious, education and social entity including foundation, cooperatives or individual who run small and micro business, as long as such grant is no related to business activity, jobs, ownership or controlling interest between the parties.
3. Enterprise who transfer land and/or building as grant to religious, education and social entity including foundation, cooperatives or individual who run small and micro business, as long as such grant is no related to business activity, jobs, ownership or controlling interest between the parties.
4. Transfer of inheritance assets.
5. Enterprise which transfer land and/or building as result of merger, acquisition or business expansion which got minister of finance approval to use book value.
6. Taxpayer who transfer building in term of build operate transfer agreement, build transfer operate or utilize government land and/or building
7. Taxpayer who is not a tax subject for transferring land and/or building.

Ministry of Agrarian and layout plan /head of national land will only issue decision letter of granting rights, acknowledgement rights and transfer rights, after receiving tax payment form except for the above mentioned exemption.

Any official or seller who does not comply this regulation will get sanction according to rule and regulation. Detail procedures for this regulation will be set by Minister of Finance.

​At the effective date of this regulation, all regulation under Government Regulation No. 48 year 1994 which last amended by Government Regulation No. 71 year 2008 are still valid as long as has no contradiction to this regulation. Government Regulation No. 48 year 1994 which last amended by Government Regulation No. 71 year 2008 is no longer valid.

​This regulation will be effective 30 days after its promulgation.